GAME CHANGER:The agreement is to ease some sanctions on gold, Iran’s automotive industry and petrochemical exports, the US administration said

Photo: AFP

Iranian President Hassan Rouhani praised an agreement with world powers to ease sanctions over his country’s nuclear program, saying the accord vindicates his government’s policy of engagement.

Rouhani won election in June with a tone of moderation and a pledge to seek an easing of the sanctions that have crippled the economy.

A 15-minute phone call between Rouhani and US President Barack Obama on Sept. 27 was the first sign of the new detente and the highest-level US-Iranian encounter since before Iran’s Islamic revolution of 1979.

The next six months mark a starting point on a new chapter for the Iranian nation, Rouhani said.

If the world powers fulfill their commitments, Iran will also fulfill its commitment and act on the basis of the agreement, he said.

After his televised address, Rouhani turned to embrace a little girl who was brought up on stage with other family members of the nuclear scientists that Iran says were killed as part of a campaign against it.

“We won a deal,” said Davoud, 60, a retired office clerk, who like many Iranians asked not to be identified by his full name for security concerns.

“I was awake the whole night, watching the progress. I am sure Zarif did the best he could,” Davoud said, referring to Iranian Foreign Minister Mohammad Javad Zarif.

Under the initial deal, Iran must improve cooperation with UN monitors, commit to eliminate its stockpile of uranium enriched to 20 percent levels and halt advanced centrifuge installation, the White House said in a statement. Iran also will not commission its Arak heavy water reactor, which, if it became operational, could produce plutonium and give the country a second path to nuclear weapons.

In return, Iran will be able to repatriate US$4.2 billion in frozen assets, the Obama administration said.

The accord is to suspend some sanctions on gold, Iran’s automotive industry and petrochemical exports, potentially worth about US$1.5 billion, the administration said.

Constructive interaction is the motto of this government and it can be achieved through trust, the initial steps of which have been taken, Rouhani said.

The accord comes less than six months after Rouhani won a surprise first-round election, campaigning on pledges to resolve Iran’s nuclear dispute.

He inherited an economy in recession and an inflation rate that was 40 percent last month.

Sanctions have pushed oil output to the lowest since 1990 and squeezed the economy, which contracted more than 5 percent in the fiscal year that ended in March. Iran’s currency, the rial, lost more than half its value in the year before Rouhani’s election, due in part to sanctions denying Iran access to the world financial system.

Iran’s economy declined 5.4 percent in the year ending in March, Rouhani has said.

The two sides now aim to conclude a comprehensive accord within six months. Western nations have accused Iran of harboring nuclear-weapons ambitions, a charge it denies.

The US and Israel have said they are willing to use force if needed to prevent that from happening.

The rial strengthened to 29,400 per US dollar in unregulated trading at 11:36am in Tehran yesterday, from 29,980 on Tuesday last week, a day before the latest round of nuclear talks resumed, according to figures compiled by Daily Rates for Gold Coins & Foreign Currencies, a Facebook page used by traders and companies in Iran and abroad.